Peloton Interactive, Inc. PTON defied expectations with their fourth-quarter fiscal 2024 results, surpassing both earnings and revenue projections. This success propelled the company’s shares to soar an impressive 12% in pre-market trading on Aug 22.
Surpassing Expectations
PTON reported an adjusted loss per share of 8 cents, beating the expected 18 cents loss forecasted by Zacks Consensus. Contrastingly, in the prior-year quarter, the company had reported a loss of 68 cents per share. Revenues for the quarter reached $643.6 million, surpassing the Zacks Consensus Estimate of $626 million. It is worth noting that this revenue figure remained almost unchanged year over year.
The company reported Connected Fitness segment revenues of $212.1 million, showing a 4% decrease year over year. In contrast, Subscription revenues increased by 2% compared to the previous year, reaching $431.4 million.
Operational Performance
Peloton closed the quarter with 2.98 million Ending Paid Connected Fitness Subscriptions, marking a net decline of 75 thousand. The average net monthly paid Connected Fitness subscription churn stood at 1.9%. Additionally, the company registered 615 thousand Peloton App subscribers, reflecting a net decrease of 59 thousand with an average monthly paid app subscription churn of 8.4%.
Financial Overview
In terms of costs, during the three months ending on Jun 30, 2024, total operating expenses, inclusive of restructuring and impairment expenses, amounted to $375.3 million, down from $426.8 million in the prior-year quarter. General and administrative expenses saw a notable decline of $23.3 million to $186.2 million compared to a year ago.
Future Expectations
Looking ahead to the first quarter of fiscal 2025, Peloton anticipates Ending Paid Connected Fitness Subscriptions to be in the range of 2.88-2.89 million, down 3% from the previous year. Ending Paid App Subscriptions are expected to be in the range of 0.56-0.57 million, with revenues projected to range between $560 million and $580 million.
For the full fiscal year 2025, the company forecasts Ending Paid Connected Fitness Subscriptions ranging from 2.68-2.75 million, a 9% decline from the previous year. Ending Paid App Subscriptions are projected to be in the range of 0.57-0.62 million, with revenues expected between $2,400 million and $2,500 million, marking a 9% decrease from the year prior.
Peloton currently holds a Zacks Rank #3 (Hold).
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